BECG Pt.-IIntroduction to business ethics

BECG-2: Ethical Concepts and Theories

Ethical Concepts and Theories

Concepts of Utilitarianism and Universalism – Theory of Rights, Theory of Justice –

Virtue Ethics – Ethics of Care

ETHICAL CONCEPTS

•Ethical Subjectivism

•Ethical relativism

• Consequentialism

•Ethics of Virtues

• Ethical Dilemmas in Business

Ethical Theories : Three Subject Areas

• Metaethics

• Normative Ethics

• Applied Ethics

METAETHICS

Entire gamut of ethical issues “The Study of the origin

and meaning of ethical concepts”

- it covers three issues

Metaphysical issues – whether the moral values

exist independently of humans or they are simply human

conventions

Psychological issues – physiological basis of the

moral action

Linguistic issues – deals with the meaning of the

key moral terms, we use

NORMATIVE ETHICS

- Something that ‘guides’ or ‘controls’

- Branch of ethics that guides human conduct

- Sets of certain moral standards that help us to determine what is right and what is wrong

Examples:

golden rules : we should treat others the same way that we want others to treat us. – one single principle on the basis of which an action may be adjudged ‘right’ or ‘wrong’

Set of fundamental principles- such as “moral rights to life and liberty” which serve as guide to ethical behavior

Pre – requisites for application of a moral Principle

Prescriptive – imperative or command, Universal – applicable to all in a given situation, Overriding – primary consideration, Public – presupposes social intention, Practical – achievable by average individual

Normative Ethics: Contd.

Three Theories “how should one act in particular circumstances”

1) Teleological or Consequentialist Theory: “Thinking rationally about ends” –an action is considered morally correct if the consequences of that action are more favorable than unfavorable Determine ethics of an act by looking to the probable outcome or consequences

of the decision (the ends)

2) Deontological ethical theory: focus on certain fundamental duties that we have as human being, duties to God, duties to oneself includes preserving ones life and happiness ,duties to others including family and society Determine the ethics of an act by looking to the process of the decision (Means)

3) Virtue Ethics : Virtues may be defined as any disposition of character or personality that an individual desires in himself or others Theory emphasizes character development rather than the articulation of abstract moral principles that guide action

Three definitions of goodEach definition give different consequentialist moral theory

Egoism – if consequence of that action are more

favorable than unfavorable only to individual performing that action Utilitarianism – if consequences of action are

more favorable than unfavorable to everyone Altruism – if consequences of action are more

favorable than unfavorable to everyone except the individual

Consequentialism

• Chief intellectual forces in the development of utilitarianism:– Jeremy Bentham (1748-1832)– John Stuart Mill (1806-1873)

• Utilitarianism directs us to make decisions based on greatest “good” (or “utility”) for the greatest number as the end result

• Most basic form of utilitarian analysis : cost- Benefit Analysis; where you tally the costs & benefits of a given decision & follow the decision that provides greatest

• Weighing social costs and benefits• A general term for any view that holds that actions and policies should be evaluated on the basis

of the benefits and costs they will impose on society• Right action and policy is the one that will produce the greatest net benefits or the lowest net

costs• Strong powerful theory, because it is liberal• It appeals to no authority in resolving differences of opinion• Differences of opinion are irrelevant except as they create a majority or minority• Able to describe much of the process of human decision- making, its process seems “neutral”-

well suited to many decisions• Egalitarian process as no one person’s “good” valued more than another• Weaknesses:

– Some persons may suffer greatest harm- while others receive only modest benefits– Possibility of “injustice” regarding the distribution of goods– Rights of any one person are not taken into account, no rights have greater weight than others

Utilitarianism

Utilitarianism- Contd.• Jeremy Bentham (1748-1832) :

– The right course of action from an ethical point of view would be to choose the policy that would produce the greatest amount of utility

– Assumes that we can somehow measure and add the quantities of benefits produced by an action and subtract from them the measured quantities of harm the action will have and thereby determine which action produces the greatest total benefits or the lowest total costs

– An action is right if it produces the most utility for all persons affected by that action (including the person performing the action)• First, I should consider what alternative action or policies are available to me

on that occasion• Second: for each alternative action, I must estimate the direct and indirect

benefits and costs that the action will probably producer for each and every person affected by the action in the foreseeable future

• Alternative that produces the greatest sum of total utility must be chosen as ethically appropriate course of action

Utilitarianism is also the basis of economic Cost-Benefit Analysis . Efficiency- means operating in such a way one produces the most, one can with the resources at hand- is what utilitarianism advocates

Distributive Justice

• Conceptualized by Harvard Philosopher, John Rawls- Distributive justice is another teleological approach of decision making, based on the concept of fairness– It holds that ethical acts or decisions are those that lead to an

equitable distribution of goods and services– Rawls suggests that we should consider how we could distribute

goods and services- if we were under the ‘veil’ of ignorance, that prevented us from knowing our status in the society (our intelligence, wealth, appearance)• What rules we would impose on this society if we had no idea

whether we would be princes or poppers– High taxes and expensive welfare projects which would benefit

impoverished but prove costly to the wealthy or– We should advocate a pure market based system that demonstrated

each of us to be responsible for our own needs and desires

Justice and Fairness•Standards of justice are generally taken to be more important than utilitarian consideration

–If society is unjust to some of its members, then we normally condemn that society, even if injustices secure more utilitarian benefits for everyone: we condemn a society that uses slavery even if slavery makes that society more productive---greater benefits for some can not justify injustices for others–Standards of justice do not generally override moral rights of individuals- reason: justice is based on individual moral rights

• Types of Justice:–Distributive Justice : concerned with the fair distribution of society’s benefits and burdens–Retributive (punitive) Justice: Just imposition of punishment and penalties on those, who do wrong

•Just penalty is one that in some sense is deserved by the person who do wrong (Retributive justice would be at issue, for example, if we were to ask whether it would be fair to penalize Cotton Mills for causing brown lung disease among their workers)

–Compensatory Justice: concerns with the just way of compensating people for what they lost when they were wronged by others

•A just compensation is one, that in some sense is proportional to the loss suffered by the person being compensated (such as loss of livelihood)

Summary of Beliefs and Problems in the Five Major Ethical Systems

Ethical Universalism•The school of ethical universalism holds that in terms of biological and psychological needs, human nature is everywhere the same.•To be a ethical universalist you only have to agree that there is some kind of action that’s always right or always wrong.•The relevant kind may be something very general, e.g. “doing something that brings about the greatest good for the greatest number.”•Universal laws to be applied to whole of mankind•Suggests that in reaching a decision, we should consider whether it would be acceptable if everyone in every situation made this same decision- “ Act only according to that maxim whereby you can at the same time will, that it should become a universal law”- Golden rule an example•Universalism offers guidance with regard to the rules by which someone should make decisions•Kant recognized universal rights such as : – Freedom of speech– Freedom of consent– Right to privacy– Freedom of conscience

•Whether one is Hindu, Christian, Jewish, Muslim, Buddhist or another faith, the deity's laws are viewed as absolutes that must shape faith the whole of one’s life, including the life at work

• Ethical Universalism says that there are universal moral codes, things that are right or wrong, either ordained by god or by some natural moral law of the universe.

Ethical relativism says that it really depends on the way you view things.

Examples:

Universalism - murder is wrong because god says it's wrong.

Relativism - murder is wrong, for some people, but it's okay sometimes, like during war or when you are murdering a serial killer.

Ethical Universalism: Contd.

Ethical Relativism vs. Ethical Universalism

• Ethical relativists hold that there is no kind of action that is always,

everywhere and for everyone right or wrong.

• While as per Universalism, Human rights assume universalism

• Ethical universalists hold that there is some (at least one) kind of action that is

always, everywhere and for everyone right or wrong.

• Ethical universalists do not claim that every kind of action is either always right

or always wrong!• Ethical relativism - each society's view of ethics considered legitimate and ethical • Ethical universalism - basic moral principles transcend cultural/national boundaries

As per Universalism: Morality is universal, objective & absolute If an action/intention/character is right (or wrong) at one place & time the

same (or relevantly similar) action/intention/character will be right (or wrong) in all places & at all times

No exceptions, exemptions, excuses

Theory of Rights• Utilitarianism is unable to deal with moral issues- relating to rights

– Individual entitlements to freedom of choice and well being

• Rights are individual’s entitlement to something– Legal Rights: entitlements that derives from a legal system that permits or

empowers a person to act in a specified way or that requires others to act in certain ways towards that person

– Moral Rights: rights that human beings of every nationality possesses to an equal extent simply by virtue of being human beings- Universal

• Characteristics of rights: – A right is an individual's entitlement to something– Rights derived from legal system are limited by jurisdiction– Moral or Human Rights are based on moral norms and are not limited by

jurisdiction

• Summary of Moral rights: – Tightly correlated with duties– Provide individuals with autonomy and equality in the free pursuit of their interests– Provide a basis of justifying one's actions and invoking the protection or aid of others

• Positive Rights: Duties of other agents( it is not always clear, who) to provide the holder of the right with whatever he or she needs to freely pursue his or her interests

• Negative Rights: Duties others have not to interfere in certain activities of other person who holds the right

• Contractual Rights: Contractual rights and duties(sometimes called special rights and duties or special obligations) are the limited rights and correlative duties that arise when one person enters an agreement with another person.

• Basis of Moral Rights:– Immanuel Kant (1724-1804) : Theory based on moral principles that Kant called

the “Categorical Imperative” ( the requirement that everyone should be treated as a free person equal to everyone else)• Maxim: A maxim for Kant is the reason a person in a certain situation has, for

doing, what he or she plans to do. A maxim would “become a universal law”- if every person in a similar situation chose to do the same thing for the same reason“ An action is morally right for a person in a certain situation if, and only if, the person’s reasons for carrying out the action is a reason that he or she would be willing to have every person act on in similar situation”

Theory of Rights: Contd.

• First Formulation of Categorical Imperative: incorporates two criteria for determining moral right and wrong– Universalizability: the person’s reasons for acting must be reasons that

everybody could act on at least in principle– Reversibility: the person's reasons for acting must be reasons that he or she

would be wiling to have all others use, even as a basis of how they treat him or her– There is an obvious similarity between the categorical imperative and the so

called Golden Rule : “Do unto others as you would have them to do unto you”

– Kent’s Categorical imperative focuses on a person’s interior motivation and not on consequences of external actions

• Second formulation of Kant’s categorical imperative: an action is morally right for a person if, and only if, in performing the action, the person does not use others merely as a means for advancing his or her own interests, but also both respects and develops their capacity to choose freely for themselves

• Kent’s Categorical Imperative Formulas: – Never do something unless you are willing to have everyone do it– Never use people merely as means but always respect and develop their ability to

choose for themselves

Theory of Rights: Contd.

• Libertarian Philosophers: ( Robert Nozick, American Philosopher)believe that freedom from human constraint is necessarily good and that all constraints imposed by others are necessarily evil except when needed to prevent the imposition of greater human constraints.

• Nozick argues that negative right to freedom from coercion of others implies that people must be left free to do what they want with their own labor and whatever products they manufacture by their own labour

Theory of Rights: Contd.

Virtue Ethics

• Moral Virtue: An acquired disposition that is valued as part of the character of a morally good human being and that is exhibited in the person’s habitual behavior

• Theory of Moral Virtue: – Aristotle (Greek Philosopher) : habits that enable a person to live according to reason.

With respect to emotions of fear , for example courage is the virtue of responding to fear with a reasonable amount of daring, whereas cowardliness is the vice of not being daring enough to respond to fear, and recklessness is the vice of being too daring in response to fear• Virtues are habits of dealing with one’s emotions, desires and actions in a manner that seeks

the reasonable middle ground and avoids unreasonable extremes, whereas vices are habits of going to the extreme of either excess or deficiency

– St. Thomas Aquinas (a Christian philosopher): habits that enable a person to live reasonably in this world and be united to God in the next

– Alasdair MacIntyre (American Philosopher): disposition that enable a person to achieve the good at which human “practices” aim

– Edmund L. Pincoffs: dispositions we use when choosing between persons or potential selves. When deciding for example, whom to choose as a friend, spouse, employee or manger, we look to people’s dispositions: are they honest or dishonest, sincere or insincere, greedy or selfish, reliable or unreliable, trustworthy or untrustworthy, dependable or undependable?

• Virtue Theory: The theory that, the aim of the moral life is to develop those general dispositions called moral virtues, and exercise and exhibit them in the many situations that human life sets before us

• Virtue theory claims:– We should exercise, exhibit and develop virtues– We should avoid exercising, exhibiting, and developing vices– Institutions should instill virtues not vices

Virtue Ethics: Contd.

• consists of trust, self-control, empathy, fairness, and truthfulness

• what is moral is determined by current societal definitions

Ethics Of Care• We have an obligation to exercise special care towards those

particular persons with whom we have valuable close relationships, particularly relations of dependency

• Emphasizes to moral demands:– we each exist in the web (network) of relationships and should

preserve and nurture those concrete and valuable relationships we have with specific persons

– We each should exercise special care for those whom we are concretely related by attending to their particular needs, values, desires and concrete well being as seen from their own perspective

– And by responding positively to these needs, values, desires and concrete well being , particularly those who are vulnerable and dependent on our care

• An ethic that emphasizes caring for the concrete well being of those near to us

• Claims ethics need to b e impartial• Emphasizes preserving and nurturing concrete valuable

relationships• Says, we should care for those dependent on and related to us• Communitarian Ethics: An ethic that sees concrete

communities and communal relationships as having a fundamental value that should be preserved and maintained

Ethics Of Care: Contd.

Integrating the Main Ethical Standards

• Utilitarian standards must be used when we do not have the resources to attain everyone’s objectives, so we are forced to consider net social benefits and social costs consequent on the actions (or policies or institutions) by which we can attain these objectives

• Rights approach be employed when our actions and policies will substantially affect the welfare and freedom of specifiable individuals ,. Moral reasoning of this type forces consideration of whether the behavior respects the basic rights of the individuals involved and whether the behavior is consistent with one’s agreements and special duties

• Moral judgments are also in part, based on the standards of Justice , that indicate how benefits and burdens should be distributed among the members of a group. Moral reasoning on which such judgments are based will incorporate considerations concerning whether the behavior distributes benefits and burdens equally or in accordance with the needs, abilities, contributions and free choices of people as well as the extent of their wrongdoings

• Moral judgments based on standards of Caring indicate the kind of care that is owed to those with whom we have special concrete relationships, particularly of dependency

• Utilitarian standards consider only the aggregate social welfare but ignores the individual and how that welfare is distributed

• Moral rights consider the individual but discount both aggregate well- being and distributive considerations

• Standards of justice consider distributive issues but ignore aggregate social welfare and the individual as such

• Standards of caring consider the partiality that must be shown to those close to us, they ignore the demands of impartiality

• Moral reasoning should incorporate all four kinds of moral considerations, although one or the other may turn out to be relevant or decisive in a particular situation

Integrating the Main Ethical Standards-Contd.

1) Does the action, as far as possible, maximize social benefits and minimize social injuries?

2) Is the action consistent with the moral rights of those whom it will affect?3) Will the action lead to a just distribution of benefits and burdens?4) Does the action exhibit appropriate care for the well being of those who

are closely related to or dependent on oneself?